June 9, 2017 / 8:28 AM / a year ago

Japan's insurance lobby calls for early debate on BOJ stimulus exit plan

TOKYO (Reuters) - The head of Japan’s life insurance lobby called on the Bank of Japan to begin debating as soon as possible a future exit strategy for its ultra-easy monetary policy, even though an actual withdrawal of stimulus could be some time away.

FILE PHOTO: A man riding a bicycle rides past the Bank of Japan building in Tokyo, Japan April 27, 2017. REUTERS/Kim Kyung-Hoon

Growing signs of life in Japan’s economy have presented the BOJ with a communication challenge, pushing it to be clearer with markets on how it might dial back its stimulus without scaring investors that such a move is imminent.

“The BOJ shouldn’t be afraid of revising (its exit strategy) in the future and openly debate the subject now, paying heed to market voices,” Akio Negishi, chairman of the Life Insurance Association of Japan, told a news conference on Friday.

BOJ officials say they hope to convince markets they have a credible exit strategy in mind, without giving out details on concern doing so too soon could confuse markets.

They also remain reluctant of presenting numerical forecasts on how an exit could affect the BOJ’s balance sheet, saying an actual exit path could be quite different from what the central bank predicts now.

But Negishi said that through good dialogue, the BOJ can avoid causing market confusion.

“We hope the BOJ releases (details of an exit strategy) with clear, meticulous explanation” that could avoid causing market confusion, he said.

Many analysts expect the BOJ to lag well behind its U.S. and European counterparts in withdrawing its huge stimulus as inflation stagnates around zero percent, well below its target.

Reporting by Taiga Uranaka and Leika Kihara; Editing by Jacqueline Wong

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